“Articles of incorporation” (Teikan: “定款”) is a very important document when you start up your business no matter which country you belong to. Especially, if you want to set up your company in Japan, “Articles of incorporation” need to be submitted to a legal affairs office when you register your company, and to an immigration office when you apply for a business visa.
In most cases, a foreigner swamped with other miscellaneous tasks while proceeding with company establishment tends to leave creating “Articles of incorporation” to an Administrative Scrivener or a lawyer.
However, it is important for you to create this in terms of grasping a big picture view of your establishing company. This knowledge is very useful when you’re required to explain about your company if you fall into a contingency that causes trouble to clients and stakeholders.
There is no loss in knowing how to create this. Rather, you should experience creating “Articles of incorporation” to learn a part of the legal rules of Japanese company establishment.
- 1 How to write “Articles of incorporation”
- 2 Create articles of incorporation along the format
- 3 Chapter 1, general rules (Business purpose, head office location, advertisement policy)
- 4 Chapter 2 stocks
- 5 Chapter 3, General Shareholders’ Meeting < Omission of Calling Procedures, Resolution>
- 6 Chapter 4, board of directors
- 7 Chapter 5, fiscal year
- 8 Chapter 6, additional rules < settlement day, founder's name, address, number of shares>
- 9 (Note) company with board of directors and company without board of directors
- 10 How to submit the article of incorporation
How to write “Articles of incorporation”
Decide company’s name
Company’s name on “Articles of incorporation” is called “Shougou” (商号) in Japanese. There are three things you pay attention to before naming your company.
- You can check it with commercial survey book, “Shougyouchousabo” (商業調査簿) at a local legal affairs office
- You can check it by Japan Platform for Patent information
- You search your company’s name by google. Even if the same name company is not big which you found, if it corresponds to an article of “Unfair Competition Prevention Act”, you can’t use the name
Mention what kind of business you are going to run through the company. There are 3 things you pay attention to.
- If you don’t mention business purpose, there is the possibility that you can’t obtain the permission or license
- Business purpose should have simple consistency that anybody can understand what company it is from the business purpose. Don’t write business that you want to do someday in the future
- The projects such as volunteer activities, a donation to an organization, and charity activities which is not directly related to making a profit, are not included in “profitable business”
If you add business purpose later, it costs you 30,000 yen in the name of “registration and license tax”
Head office location
Head office location is called, “Hontenshozaichi” (本店所在地). If you come to Japan with a tourist visa to stay for 90 days in order to apply for the first 4-month “Business Management” visa, the articles of incorporation, “Teikan” (定款), is one of the submitting documents to an immigration office.
However, while you stay in Japan with a tourist visa, resident card, “Zairyu card” (在留カード), is not issued and you have no documents and certificates that identify yourself in Japan except for your passport. So, you can’t rent an office at this time except for the case that a property owner is willing to rent you a room with your passport and certificates issued in your country.
If you have a Japanese partner, you can write an office address rented in the name of your Japanese partner but if you apply for it yourself, this column should be blank.
Other things to decide
- Public notice policy
- Capital amount
- Fiscal year
- The number of starting members
- The number of directors
- Total number of authorized shares, share with restriction on transfer
- Installment of the board of directors
Create articles of incorporation along the format
You can create articles of incorporation from scratch on white papers. However, if there is a reusable existing format which simply makes you fill in the blank, it is much easier to make articles of incorporation perfectly. You can buy the format at a stationery store and download it from the internet. (Free downloadable format site)
“株式会社” means “Co., Ltd.” You fill your company’s name excep for “Co., Ltd.” If company’s name is expressed with alphabet, you fill it in Katakana (Japanese letter). “○○○○” is where you fill your company’s name.
You fill in the year, month, date.
You wirte the date that you created this articles of incorporation
You write the date that the article of incorporation was recognized by a notary.
This articles of incorporation itself is just a paper filled with required content about your company. This document will produce its effect legally after being recognized by a notary. So, after you complete this document, you need to go to a notary office to have your document certified.
“会社設立” means “company establishment”. In short, you write company establishment date. Company establishment is when you completed corporate registration at a legal affairs office.
Chapter 1, general rules (Business purpose, head office location, advertisement policy)
This section starts from the title, “第一章 総則<事業目的・本店所在地・公告の方法>”
Put your company’s name in “××××××”
Put your business purpose in “××××××”
Head office location
Put your company’s location in “××”
Public notice policy
Put your public notice manner in “××××”
Public notice, “Koukoku” (公告) is notfying publicly the things that have a great influence on clients and creditors. This is what you are obliged to do legally. If you neflect this notification on purpose, you are fined eaqual to or less than 1 million yen.
Chapter 2 stocks
This section starts from the title, “第二章 株式<発行可能株式総数・認証機関>”
Put your company’s available share amount in “×××”.
Put Certification Authority in “×××”.
Certification authority to approve share transfer is a board of directors if the company installs it. If a company without a board of directors, shareholders are principally the certification authority.
This section starts from the title, “第三章 株主総会<招集手続きの省略・決議>”
If your company adopts voting by ballot or electronic voting, calling procedures cannot be omitted. If a company omits resolution and also omit a calling procedure, a company may end up depriving shareholders of the opportunity to indicate their intention.
Omission of calling procedures
The company act, article 309, clause 2, defines that shareholders with the majority of voting rights attend the meeting, and the majority, equal to or more than two-thirds voting rights entitled to shareholders will decide the resolution.
“The majority of voting rights entitled to attended shareholders” for resolution can lower less than the majority. However, the resolution of the election of directors needs more than one-third of shareholder’s voting rights
Chapter 4, board of directors
This section starts from the title, “第四章 取締役<取締役任期>“.
Directors’ Term of Board of Director
Put term of board of director in “××”
Chapter 5, fiscal year
This section starts from the title, “第五章 計算<事業年度>“.
Put fiscal year in “MM”, “DD”.
This section starts from the title, “第六章 附則<決算日・発起人の氏名・住所・株式数>”
Put capital amount is “×××”.
(Note) company with board of directors and company without board of directors
company without board of directors
If you want to install a board of directors in your company, you need to have 3 directors. In short, if you establish a company with less than 2 people, you don’t need to set up a board of directors in your company. If you don’t install a board of directors in your company, the General meeting of shareholders shall be a decision-making body.
company with board of directors
The advantage you install a board of directors in your company is that a board of directors is empowered to make most of the decisions on business management. You need also to install auditors to check and observe if a board of directors fulfills the role. If you don’t install a board of directors, auditors installment is optional.
How to submit the article of incorporation
After you complete the article of incorporation, you need to submit this a local notary office. As I said, this document will produce its effect legally after being recognized by a notary. The following things are the necessary documents and certificates you need to take to.